In-N-Out Burger, Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 06 July 2018
• Docket Number: No. 17-60241,17-60241
• Citation: 894 F.3d 707
• Parties: IN-N-OUT BURGER, INCORPORATED, Petitioner Cross-Respondent v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner
• Court: U.S. Court of Appeals — Fifth Circuit

894 F.3d 707

IN-N-OUT BURGER, INCORPORATED, Petitioner Cross-Respondent

v.NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner

No. 17-60241

United States Court of Appeals, Fifth Circuit.

July 6, 2018

Bruce J. Sarchet, Littler Mendelson, Sacramento, Edward F. Berbarie, Littler Mendelson, P.C., Dallas, for Petitioner Cross-Respondent.

Linda Dreeben, Esq., Deputy Associate General Counsel, Elizabeth Ann Heaney, Esq., National Labor Relations Board Appellate & Supreme Court Litigation Branch, Washington, Mischa Kristian Bauermeister, Esq., Timothy L. Watson, National Labor Relations Board, Fort Worth, TX, for Respondent Cross-Petitioner.

Before KING, ELROD, and GRAVES, Circuit Judges.

JAMES E. GRAVES, JR., Circuit Judge:

In April 2015, employees at an In-N-Out Burger in Austin, Texas wore buttons demonstrating solidarity with the "Fight for $15" campaign, a national movement advocating for a $15 per hour minimum wage, the right to form a union without intimidation, and other improvements for low-wage workers.¹ But when managers responded by invoking a company rule that prohibits employees from "wearing any type of pin or stickers" on their uniforms, the employees desisted. The National Labor Relations Board (the "Board" or "NLRB") found the company's rule unlawful under the National Labor Relations Act (the "Act" or "NLRA"). In-N-Out now asks this court to set aside the Board's order, while the Board asks us to enforce it. For the reasons stated below, we DENY In-N-Out's petition for review and GRANT the Board's cross-application for enforcement.

I

In-N-Out Burger, Inc. owns and operates a chain of over 300 fast-food restaurants in California, Texas, and several other western states. In-N-Out requires its employees to follow a detailed appearance code and to wear a uniform consisting of "nine elements": white pants, a white shirt, white socks, black shoes, a black belt, a red apron, a gold apron pin, a company-issued name tag, and a hat. The company also maintains a rule in its employee handbook that states: "Wearing any type of pin or stickers is not permitted." In-N-Out strictly enforces its uniform policy and appearance rules.

On April 17, 2015, Amanda Healy, an employee at an In-N-Out restaurant in Austin, wore a "Fight for $15" button during work. The button was the size of a quarter and featured "$15" superimposed on an image of a raised fist.

No manager spoke to Healy about her button that day, but when employee David Nevels asked manager Daniel Moore if he could wear a "Fight for $15" button, Moore responded that the button was "not part of the In-N-Out uniform."

The following day, Healy again wore a "Fight for $15" button. This time, Moore questioned her about it. Healy told Moore that the button referred to a campaign by fast-food workers pursuing "a higher minimum wage, living wages." Moore asked Healy if she thought store manager Nick Palmini "would be okay" with her wearing the button. Healy replied that while she believed he would be, it was her understanding that Palmini could not ask her to remove the button. The conversation then ended. That same day, employee Brad Crowder wore a "Fight for $15" button similar to Healy's. An assistant manager reported Crowder to Palmini, who called Crowder to his office. Palmini asked Crowder if he was familiar with the company's uniform policy. Crowder replied that he was. Palmini then told Crowder that he could not add anything to the uniform and instructed Crowder to remove the button. Crowder complied but informed Palmini that he would be filing an unfair labor practice charge with the National Labor Relations Board.

Notwithstanding the "no pins or stickers" rule, In-N-Out requires its employees to wear company-issued buttons twice a year. During the Christmas season, employees are required to wear buttons stating "MERRY CHRISTMAS / IN-N-OUT HAMBURGERS / NO DELAY." During the month of April, employees must wear buttons soliciting donations to the In-N-Out Foundation, a nonprofit organization established by the company's owners that focuses on preventing child abuse and neglect. Those buttons read: "TEXT '4KIDS' TO 20222 TO DONATE / YOUR $5 WILL HELP PREVENT CHILD ABUSE / IN-N-OUT BURGER FOUNDATION." The In-N-Out Foundation buttons come in four variations, each featuring a picture of a different child. The Christmas and In-N-Out Foundation buttons are approximately three times larger in diameter than the "Fight for $15" buttons.

Unfair labor practice charges were filed against In-N-Out, and following an investigation, the NLRB's General Counsel issued a complaint alleging that the company's "no pins or stickers" rule violated the National Labor Relations Act. An administrative law judge ("ALJ") held a hearing at which Healy, Palmini, Moore, and In-N-Out's vice president of operations, Robert J. Lang, Jr., testified. In-N-Out sought to demonstrate that its interest in maintaining a unique public image and its concern with ensuring food safety constituted "special circumstances" sufficient to justify the rule. The ALJ rejected the company's "special circumstances" defense, found that In-N-Out had committed unfair labor practices by maintaining and enforcing the "no pins or stickers" rule and by directing Crowder to remove his "Fight for $15" button, and issued a recommended order. In-N-Out then sought further review by the Board.

The Board's decision largely affirmed the ALJ's findings and conclusions. In-N-Out Burger, Inc. , 365 NLRB No. 39, 2017 WL 1103798 (Mar. 21, 2017). The Board adopted the ALJ's findings that In-N-Out's maintenance and enforcement of the "no pins or stickers" rule and the instruction to Crowder violated Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1). In addition, the Board found that In-N-Out committed an unfair labor practice when Moore told Nevels that the "Fight for $15" button was not a part of the company uniform. Based on these findings, the Board ordered In-N-Out to cease and desist from, inter alia: "[m]aintaining and enforcing a rule that prohibits employees from wearing, while on duty, any button or insignia apart from those it has approved, and that makes no exception for buttons or insignia pertaining to wages, hours, terms and conditions of employment or union or other protected activities"; "[d]irecting employees to remove from their clothing any button or insignia pertaining to wages, hours, terms and conditions of employment or union or other protected activities"; and "[d]irecting employees that they may not wear any [such] button[s] or insignia." The Board further ordered In-N-Out to take certain affirmative actions "necessary to effectuate the policies of the Act," including rescinding its "no pins or stickers" rule, removing from its files any reference to the unlawful instructions given to Crowder and Nevels, and posting remedial notices at its locations.

In-N-Out subsequently filed a petition for review of the Board's order with this court, and the Board cross-applied for enforcement. See 29 U.S.C. § 160(e), (f).

II

A

Judicial review of NLRB decisions and orders is limited and deferential. This court "will affirm the Board's legal conclusions 'if they have a reasonable basis in the law and are not inconsistent with the [National Labor Relations] Act,' " Entergy Miss., Inc. v. NLRB , 810 F.3d 287, 292 (5th Cir. 2015) (quoting Valmont Indus., Inc. v. NLRB , 244 F.3d 454, 464 (5th Cir. 2001) ), and will uphold the Board's findings of fact so long as they are supported by "substantial evidence," Flex Frac Logistics, LLC v. NLRB , 746 F.3d 205, 207–08 (5th Cir. 2014) ; accord 29 U.S.C. § 160(e). In recognition of the Board's primary responsibility for administering the Act and its expertise in labor relations, we give significant deference to the Board's application of the law to the facts, and we will not disturb "plausible inferences [the Board] draws from the evidence, even if we might reach a contrary result were we deciding the case de novo ." Valmont Indus. , 244 F.3d at 463 (quoting NLRB v. Thermon Heat Tracing Servs., Inc. , 143 F.3d 181, 185 (5th Cir. 1998) ). To the extent the Board affirms and adopts an ALJ's findings and conclusions, we apply these same deferential standards to the ALJ's decision itself. See Weigand v. NLRB , 783 F.3d 889, 895 (D.C. Cir. 2015) ; NLRB v. KSM Indus., Inc. , 682 F.3d 537, 544 (7th Cir. 2012) ; Valmont Indus. , 244 F.3d at 463 ; Standard Fittings Co. v. NLRB , 845 F.2d 1311, 1314 (5th Cir. 1988).

B

Section 7 of the National Labor Relations Act guarantees to employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." 29 U.S.C. § 157. Section 8(a)(1) of the Act enforces these rights by making it an unfair labor practice for employers to "interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [S]ection [7]." 29 U.S.C. § 158(a)(1).

Since the Act's earliest days, it has been recognized that Section 7 protects the right of employees to wear items—such as buttons, pins, and stickers—relating to terms and conditions of employment (including wages and hours), unionization, and other protected matters. Republic Aviation Corp. v. NLRB , 324 U.S. 793, 801–03, 65 S.Ct. 982, 89 L.Ed. 1372 (1945) ; id. at 802 n.7, 65 S.Ct. 982 ("[T]he right of employees to wear union insignia at work has long been recognized as a reasonable and legitimate form of union activity, and the [employer]'s curtailment of that right is clearly violative of the Act." (quoting Republic Aviation Corp. , 51 NLRB 1186, 1188 (1943) ) ); Medco Health Solutions of Las Vegas, Inc. , 364 NLRB No. 115, 2016 WL 4582495, at *4 (Aug. 27, 2016) ; Armour & Co. , 8 NLRB 1100, 1112 (1938). Accordingly, an employer that maintains or enforces a rule restricting employees from displaying such...